On Bondster.com, you can now invest in loans from our new Bulgarian loan originator, the ITF Group. The company has been steadily growing over the past few years, both regarding loans issued and its financials.
ITF Group is a Bulgarian non-bank originator founded in 2012 and only a year later to launch its first online loans brand - SmileCredit. A new brand went live two years later – GetCash, specialized more in customers who prefer brick-and-mortar shops and direct offline communication.
Since its founding, ITF has always been in the black numbers. You can see ITF’s financial reports from the last several years in the charts below.
GetCash offers its customers four different types of loans, while “online” SmileCredit focuses on short-term installment loans with a maturity of up to one year and microloans (aka payday loans).
Headquartered in Sofia, ITF Group has issued over 132,000 loans since its establishment. Each month it assesses about 5,500 loan applications with an approval rate of 45%. About 25% of applications come from new customers, while the rest are loans issued to the company's current clients.
ITF Group employs over 50 people, and its loan portfolio grows on average by about 35% a year. The Group operates 11 branches in major Bulgarian cities. Women borrow more often from ITF (52%) than men (48%), with half of its customers being young people aged 26-40.
We informed you about the development of the moratorium imposed in Bulgaria in an article here. A remarkable thing about Bulgaria is that the deferment of repayments does not apply to non-bank companies.
Bulgaria's macroeconomic situation has deteriorated just like in other countries due to the spreading of the pandemic. The economy declined by 8.5% in the second quarter compared to a year ago. Unemployment has risen sharply to 9% but has since been decreasing to the current 7.9%. Inflation is mild (1.2%), and also the country's debt-to-GDP ratio is very low (20.7%). We can therefore expect that once the pandemic has passed, Bulgaria will resume its modest GDP growth of about 3% per year.
Interview with CEO of ITF Group Svetoslav Angelov:
What is the difference between your two brands, GetCash and SmileCredit?
At ITF Group, we have decided to create two separate brands to serve the different clients' needs best. SmileCredit is our online brand, which addresses people who are willing to go through an entirely digital loan application process, risk assessment, and transfer of funds. GetCash is our offline brand that provides a more personal approach to our clients through a network of consultants who can understand the customers’ needs and propose the most suitable products.
What types of products do you offer?
We offer our clients two types of loan products: - Instalment Loan, with variable maturities to different client groups. - Short-term payday loan, created for clients with very short-term liquidity needs.
How is the share of the number of loans and the total volume divided between the two groups, and is there a difference in the structure of clients?
ITF Group mainly focuses on Instalment Loans, representing more than 70% of our sales. Regarding the structure of the clients in the two groups, we do not observe major differences.
According to your presentation, half of the clients are aged 25-45.
Yes. The majority of our clients belong to this age group.
How did the COVID wave hit you? Has the volume of loans decreased or increased?
The COVID – 19 pandemics has led to challenging times for the most business as well as lenders. Although we have been very restrictive in loan origination during the lockdown periods, we observed an increased demand for our products. Hence, we have tightened our risk policies to absorb increased risk.
How much volume of loans will you give to the Bondster marketplace?
We are willing to have well diversified sources of funding, hence will be aiming to fund not more than 20% of our portfolio.
What will you use the capital raised for?
We will entirely use the capital to grant additional loans to our clients and grow our portfolio and increase our market presence.
In connection with the success in Bulgaria, are you considering expanding abroad?
Currently we are mainly focused on the Bulgarian market.
In the presentation, do you state that you have only had profitable years since your establishment? What is the cause?
We follow a more conservative strategy over the years and rely more on a controlled growth rather than fast growth.
Author: Jan Schönbauer, translation: Jan Koválik